A Comparison of American and German economies in WW2

[Guaporense]

Back after so long away and already starting to make things up again I see. No, the U.S. did not suddenly start "drafting a great number of men into the army in 1943". No, it did not result in a decrease in "labor input" that "reduced munitions production".

Number of people employed in war related industries peaked in 1943 in the US and decreased later on. While number of people in the armed forces increased. To a certain degree the US first produced the armaments for it's soldiers and then conscripted it's soldiers. It was a very efficient utilization of labor but natural given they didn't have to worry that much about fighting soon as the USSR was working on that.

[RichTO90]

Number of people employed in war related industries peaked in 1943 in the US and decreased later on. While number of people in the armed forces increased. To a certain degree the US first produced the armaments for it's soldiers and then conscripted it's soldiers. It was a very efficient utilization of labor but natural given they didn't have to worry that much about fighting soon as the USSR was working on that.

As usual, you seem to think that blanket assertions are the same as evidence and you still seem to believe that simple correlations provide proof of causation.

You are claiming that the decrease in industrial employment after 1943 was because "after that date they started drafting a great number of men into the army". Unfortunately though, the Troop Basis remained essentially unchanged from mid 1943 until the beginning of demobilization in mid 1945, although peak military manpower was achieved in late 1944 and early 1945. Furthermore, Selective Service inductions also decreased after 1943. Nor was it the case that the "US first produced the armaments for it's soldiers and then conscripted it's soldiers", which infers much greater centralized direction than the U.S. government ever achieved. Selected armaments production decreased after the peak numbers produced in 1943, but for many reasons - peak expenditures were in 1944 for example, for another, truck production shifted from smaller light to medium-heavy types to more costly and labor-intensive heavy and heavy types, tank production shifted from predominately light-medium to medium-heavy, aircraft production peaked in 1944 and shifted from 1930s designs to 1940s types, ship production peaked in 1944, army ammunition peaked in 1944, and so forth.

[Guaporense]

2 things:

1. From my mature perspective now that I joined the forum 5 years ago, I am sorry for being excessively careless with the data (I wouldn't be so careless if I would publish it). However, that doesn't justify being insulted as well as because my claims have a depth though behind them. For instance your claims right now that I make up stuff is incorrect. See 2nd thing.

2. While there is no centralized direction for the allocation of resources in civil society the allocation of resources proceeds in a very efficient fashion, guided by the invisible hand of the market. These types of spontaneous orders are very common in society and I suspect American allocation of labor proceeded in the same fashion: first allocated to produce the weapons and equipment required to fight the war and later allocated to the armed forces and ammunition production to supply the continued operation of the armed forces.

Output matched needs. The US first produced weapons and then, by 1944-1945, produced more ammunition and bombs.

[RichTO90]

2 things:

1. From my mature perspective now that I joined the forum 5 years ago, I am sorry for being excessively careless with the data (I wouldn't be so careless if I would publish it). However, that doesn't justify being insulted as well as because my claims have a depth though behind them. For instance your claims right now that I make up stuff is incorrect. See 2nd thing.

I will stop being insulting when you cease being excessively careless with your use of data. You haven't yet, even after a hiatus here of some years in which you attempted to peddle the same careless data elsewhere.

2. While there is no centralized direction for the allocation of resources in civil society the allocation of resources proceeds in a very efficient fashion, guided by the invisible hand of the market. These types of spontaneous orders are very common in society and I suspect American allocation of labor proceeded in the same fashion: first allocated to produce the weapons and equipment required to fight the war and later allocated to the armed forces and ammunition production to supply the continued operation of the armed forces.

The "invisible hand of the market" played little role in the directed economies of wartime in the 20th century's mass wars. And American economic utilization was actually pretty badly directed, by both the invisible hand and the visible hand. Multiple agencies with overlapping roles all trying to stay a least a little bit within the Constitution. Manpower utilization was simply badly mismanaged and industry was nearly as bad. It was the slack in civilian demand and the massive unemployment that made it possible.

Output matched needs. The US first produced weapons and then, by 1944-1945, produced more ammunition and bombs.

Except now you are being careless with historical fact as well. That quite simply is not what happened.

[South]

Sidebar; Happy holidays as to whatever is celebrated by readers. Hoping all also experience safe events.

Good morning Guaporense,

You might obtain better research and the resulting view if you narrow your efforts rather than grasp at vast material you're not experienced in.

Look at a couple or a few key segments of a national economy only. For example: petroleum, its products and distribution, rail transport and perhaps a narrow sliver of the financial arena.

You will - or should - see the US Government's "centralized direction for the allocation of resources in civil society" experienced competitive, politically charged forces from components of industry. Recall the nation's most prominent political scandal in this era was "Teapot Dome", involving a Naval Petroleum Reserve(s) [Elk Hills, California also involved].

America's "allocation of labor..." requires me to recommend you hold off on this for a couple of decades. Then, read about post WWII's Taft-Hartley Act and its 14B proviso.

Consider very carefully whether you should spend time and resources by delving into "centralized direction for the allocation of..." financial resources. There's more to all this than your referenced "invisible hand".

Warm regards,

Bob

[Guaporense]

I'm too lazy to make the computation and I probably lack some of the data for all those support ships, but it's rather obvious that US production exceeded the German one - perhaps as much as 10 times higher.
But the point is that, if you want to make a comparison of the investment in naval power, it's sensible to try to take into account all the component of naval might, and not only the flashy battleships.

Indeed. If you look at that estimate of expenditures the naval output form 1940-1944 in Germany's case represented 7.5 billion RM, out of aggregate military outlays of 450 billion RM over the same period, 1.7% of total military outlays. In the US expenditures on ships from 1941 to 1945 (including the tens of millions of tons of civilian ships to replace the ones lost to the submarine campaign), were over 40 billion dollars (in 1945 prices), that's 14% of all military outlays of the US. In RM terms US expenditures on ships were around 80-90 billion RM(1941), 11-12 times higher than Germany's, counting civilian ships. In terms of major naval vessels it was only 3.7 times higher by the tonnage figures you computed.

US military expenditures were much heavier on munitions than Germany's overall: in 1943, US military outlays were 79.7 billion dollars, munitions were 55 billion, 70% of all military outlays, combat related munitions were 38 billion, 48% of all military outlays. In Germany's case it was 112 billion RM military outlays in 1943, of which only about 25 billion were outlays on combat related munitions.

[Guaporense]

America's "allocation of labor..." requires me to recommend you hold off on this for a couple of decades. Then, read about post WWII's Taft-Hartley Act and its 14B proviso.

Consider very carefully whether you should spend time and resources by delving into "centralized direction for the allocation of..." financial resources. There's more to all this than your referenced "invisible hand"

Well, I don't think you guys understood my point: that the allocation of labor in the US appears to have followed a behavior consistent with planned goals which were not consciously pursued but as if they were. It also happened in a lot of other cases, German distribution of divisions across different fronts was such that it apparently tried to equilibrate the rate of allied advance so that allied armies reached Germany's borders at the same time across several fronts.

Understanding of many of my arguments requires some experience with economics. Also, my resulting view is based on a very broad understanding of economic history, which I have been studying for over a decade now.

[Guaporense]

Rich, while I think your specialized knowledge is valid you should learn to treat other people with minimum respect even if you disagree with the methodologies other people use. Mistakes like the ones I made can be easily found on any book on WW2 but that doesn't justify insulting the authors. People are different and when you learn to interact with other people you learn that other people have different opinions of your own, hence, if you get angry and insult people just because they don't agree with your own views, you are acting like a primitive barbarian unused to civilization and are you not going to convince me that our viewpoints are relevant.

The "invisible hand of the market" played little role in the directed economies of wartime in the 20th century's mass wars.

That doesn't contradict anything I said.

And American economic utilization was actually pretty badly directed, by both the invisible hand and the visible hand. Multiple agencies with overlapping roles all trying to stay a least a little bit within the Constitution. Manpower utilization was simply badly mismanaged and industry was nearly as bad. It was the slack in civilian demand and the massive unemployment that made it possible.

I also agree that it was possible to increase efficiency of US's war effort. Centralized direction characterized all the nations in both world wars and that was inneficient if compared to a more normal way of handling it: government buys stuff needed for the armed forces using money from taxes and bonds.

I think they choose to use centralized direction because it was more politically feasible than taxing all income at 50-60%.

Output matched needs. The US first produced weapons and then, by 1944-1945, produced more ammunition and bombs.

Except now you are being careless with historical fact as well. That quite simply is not what happened.

January-July 1945 was the peak average monthly production of bombs and ammo compared to annual averages of previous years.

[South]

Good morning Guaporense,

I can only speak for myself ("you guys") as to my development of inferences to understand your point of view.

US Government labor allocations was, indeed, consciously pursued. The pursuits met political resistence.

Many of your arguments requires a comprehensive grasp of economics and not "some experience".

Guaporense, on an advanced-level history site, at the economics section, you wrote "centralized direction characterized all the nations in both world wars".

On your second decade of economic studies, glance at what US General Joseph ("Vinegar Joe") Stillwell said about the consignee of US Lend-Lease shipped to China. Do note that "China" had more than one government at the time.

Do the same or similiar analysis for France. In the Great War, Part II, "France" also had more than one government at the time.

Was there a centralized direction for Russia on its initial participation in World War I and the later Soviet government's "centralized direction" ?

After completion of a second decade of economic studies, you'll (hopefully) see that Central Banks augmented taxes and bonds with other financial mechanisms. Recall famous terms such as President Wilson's "elastic money".

Warm regards,

Bob

[Gooner1]

1. Machine tool using industries: In 1943, Germany had 5 million workers employed in machine tool using industries which had 2.3 million machines, while the UK had 4.2 million workers in the machine tools using industries and 740,000 machines, or 5.6 workers per machine.

Where did you get those machine tool figures from? As far as I am aware the UK's and Germany's economies were of similar size both heavily industrialized and of roughly equal productivity, so how did Germany end up with six times as many machine tools? I suspect that different criteria are applying ...

[RichTO90]

Rich, while I think your specialized knowledge is valid you should learn to treat other people with minimum respect even if you disagree with the methodologies other people use. Mistakes like the ones I made can be easily found on any book on WW2 but that doesn't justify insulting the authors. People are different and when you learn to interact with other people you learn that other people have different opinions of your own, hence, if you get angry and insult people just because they don't agree with your own views, you are acting like a primitive barbarian unused to civilization and are you not going to convince me that our viewpoints are relevant.

I am treating you with minimum respect and I have not actually insulted you - I have simply made observations about the way you reason.
Nor do I have any problem with "different opinions" except for those that verge on the glorification of fascist regimes. It's not your different opinion I have a problem with, its the lazy way you treat facts and your inability to understand the difference between correlation and causation I have issues with. You haven't done anything to change the inferences I have drawn about your reasoning and so you have taken that as insults. That is your problem, not mine.

That doesn't contradict anything I said.

So you didn't actually mean to say "While there is no centralized direction for the allocation of resources in civil society the allocation of resources proceeds in a very efficient fashion, guided by the invisible hand of the market"?

I think they choose to use centralized direction because it was more politically feasible than taxing all income at 50-60%.

No, instead they chose to tax at rates from 23 to 94%.

January-July 1945 was the peak average monthly production of bombs and ammo compared to annual averages of previous years.

Except that is not what you claimed. You said "Output matched needs. The US first produced weapons and then, by 1944-1945, produced more ammunition and bombs." The inference is that it was planned that way, but it simply wasn't. A large part of the ammunition increase for Army artillery, was simply because it had been scaled back so much in 1943, due to a highly politicized "scandal" about "wasted stockpiles" that the result was a major shortage of ammunition in 1944 and early 1945. A secondary factor was the major increase in production of heavy calibers versus lighter calibers. A similar effect was seen in the production of bombs, where output of various types was heavily scaled back in 1944 - G.P. production ceased to expand, while A.P. production was hugely curtailed. Further, while Army artillery and bomb monthly production was increased in 1945, Navy production decreased.

Yes indeed, "output matched needs", but often long after the fact and without ameliorating the shortages that developed. The notion that the U.S. simply produced weapons and then the ammunition to use in them in 1944 and 1945 is incorrect.

[RichTO90]

Well, I don't think you guys understood my point: that the allocation of labor in the US appears to have followed a behavior consistent with planned goals which were not consciously pursued but as if they were. It also happened in a lot of other cases, German distribution of divisions across different fronts was such that it apparently tried to equilibrate the rate of allied advance so that allied armies reached Germany's borders at the same time across several fronts.

Actually, I think we guys understand your various "points" quite well. You might benefit from perusing The Army and Economic Mobilization, The Army and Industrial Manpower, and the two volumes on Planning and Control Activity in the Administrative History of the Navy Bureau of Personnel.

Understanding of many of my arguments requires some experience with economics. Also, my resulting view is based on a very broad understanding of economic history, which I have been studying for over a decade now.

Linking that knowledge with how they effected events requires a deeper understanding of the political and military history of World War II.

BTW, are you saying that Hitler planned on the Oder-Neisse line? Interesting...

[mescal]

According to production plans, production of all military munitions was planned to increase in Germany in 1945, aircraft was supposed to increase to 80,000 units. Your little theory that Speer was reorienting everything to present day output needs to be supported and is contradicted into the actual plans for munitions production.

Well, dreaming is free of cost ...
You can dream to produce 80k planes in 1945.
But you can't "plan" for such figures for 1945 in late 1944. Speer sold it to Hitler as a "plan", but it was a pipe dream.

And with regard to the cuts in investments : I do not have overall figures, but some indicators are useful.
Notably and on different levels :
* factory floor surface shrank in 1944,
* the Bf-109 was still one of the most produced fighter though it was outdated
* working slave labor to death may temporarily increase production, but it cannot be seen as a durable and reliable policy.

(and the fact that it was contradicted "by production plans" is almost as ridiculous as said production "plans").

Steel: in 1937, the territories Germany controlled in June 1940 produced 38 million tons of steel,

And guess what ? ... it wasn't the case anymore after Germany invaded.
You've been told previously and more than once that projecting pre-war data to the wartime years is unsound, because the war and occupation had very significant effects.
Not the least the fact that the Germans themselves plundered said occupied countries, and that occupation de facto put those countries under British blockade.

Understanding of many of my arguments requires some experience with economics.

I have some and a bit more, thank you.
But you would understand and clarify your own arguments better if you had some experience in statistical methodology.

Nor do I have any problem with "different opinions" except for those that verge on the glorification of fascist regimes.

What is worse : glorification of fascist regimes grounded on wrong data or on correct data ?
Tough question ....

[RichTO90]

What is worse : glorification of fascist regimes grounded on wrong data or on correct data ?
Tough question ....

Two sides to a coin really. But there is only one side to guaporense's coin as he has already quickly proven.

"Different opinions" are one thing. When that "different opinion" is glorification of totalitarian regimes - I probably shouldn't have said fascist, except strictly WRT World War II - is when I get irritated. When that glorification is masqueraded as a condemnation of the "evil Allies" for contravening "laws of war" that didn't exist and then boo-hooing over all the poor dead German civilians is when I get angry.

OTOH, misuse of data is simply misuse of data. And when that misuse is calculated, ignores corrections, and simply repeats the same nonsensical litany of bad data and claims for simple correlation "proving" causation is also when I get angry. As has already been demonstrated by his most recent return, guaporense sheds crocodile tears over being "insulted", while claiming "sorrow" over having "in the past" used bad data, something that, oh no my goodness, never, will he do it again. And then promptly posts bogus "casualty statistics", which he was long ago corrected on, in another thread here at AHF, requiring yet another correction.

[Guaporense]

According to production plans, production of all military munitions was planned to increase in Germany in 1945, aircraft was supposed to increase to 80,000 units. Your little theory that Speer was reorienting everything to present day output needs to be supported and is contradicted into the actual plans for munitions production.

Well, dreaming is free of cost ...
You can dream to produce 80k planes in 1945.
But you can't "plan" for such figures for 1945 in late 1944. Speer sold it to Hitler as a "plan", but it was a pipe dream.

The survey people used the discrepancy between the numbers in those plans and actual output as proof that strategic bombing worked as the output from July to March 1945 feel short of planned numbers by 18,000 units.

And with regard to the cuts in investments : I do not have overall figures, but some indicators are useful.
Notably and on different levels :
* factory floor surface shrank in 1944,
* the Bf-109 was still one of the most produced fighter though it was outdated
* working slave labor to death may temporarily increase production, but it cannot be seen as a durable and reliable policy.

*The Bf-109 wasn't outdated in 1944, it suffered continuous updates and was still relevant as experienced pilots could still shoot down allied aircraft with it.
*Factory floor surface in which industry? I agree they stopped investing in 1944, machine tool production feel to 110,000 units in 1944 compared to over 200,000 units 3 years before.

Anyway, it didn't make sense to invest since nearly all industries were working on a single shift.

Steel: in 1937, the territories Germany controlled in June 1940 produced 38 million tons of steel,

And guess what ? ... it wasn't the case anymore after Germany invaded.
You've been told previously and more than once that projecting pre-war data to the wartime years is unsound, because the war and occupation had very significant effects. Not the least the fact that the Germans themselves plundered said occupied countries, and that occupation de facto put those countries under British blockade.

The most significant effect of war on those territories would be to increase steel production. As war uses relatively more steel than peacetime economic activities so increased demand increases output. For example, in the US steel production increased in response to war. UK didn't increase because they could import from the US and the USSR's output increased if you only look at Siberia. The main raw materials for steel production could be easily produced in Europe, coal, obviously, and iron ore was also produced in significant quantities.

Understanding of many of my arguments requires some experience with economics.

I have some and a bit more, thank you.

Prove it, because you don't appear to understand the how prices work in allocating resources.

But you would understand and clarify your own arguments better if you had some experience in statistical methodology.

I didn't need to actually use any fancy statistical methodology in my previous arguments. It's just descriptive statistics.

Nor do I have any problem with "different opinions" except for those that verge on the glorification of fascist regimes.

What is worse : glorification of fascist regimes grounded on wrong data or on correct data ?
Tough question ....

Showing and understanding the puzzle posed by these two facts:
1. Germany had access to vast economic resources,
2. German armed forces had great difficulty with supply of equipment and ammo, which feel short in proportion to those resources.

Explaining it as caused by the inneficiency of Nazi economic policies is a glorification of facist regimes? Quite to the contrary, arguments such as Tooze's story that Nazi policies made fully efficient utilization of existing resources and that they failed despite being fully efficient, that's the true glorification of facist regimes.

The observation that the facists controlled the bulk of Europe, an area with about 1/3 of the world's economic activity during the 1930's and despite that, they failed to produce adequate supplies for their armed forces, is indeed a powerful historical criticism of the general inefficiency of those regimes.